Most sellers focus on the sales price, but that’s not the number you take home. Here’s what really affects your final payout.
If you’re thinking about selling a home in Memphis, Tennessee, there’s a crucial question many homeowners overlook: How much will I actually walk away with after the sale?
Many people focus solely on the listing price, assuming that a strong sale automatically means a strong payout. In reality, the number you see on paper often doesn’t match what ends up in your pocket, thanks to commissions, repairs, closing costs, and potential taxes.
Selling a home in Memphis can absolutely be profitable, especially in well-positioned neighborhoods, but it’s not free. Being prepared gives you more control over your final numbers. Here’s a breakdown of the most important costs to consider.
1. Real estate commissions. For most Memphis home sales, real estate commissions are the largest expense. Commissions typically range from 5% to 7% of the sales price and are split between the listing agent and the buyer’s agent. On a $350,000 home, this could amount to $17,000 to $21,000.
While commissions may feel like a big number, they cover essential services such as pricing strategy, professional marketing, negotiation, transaction management, and risk protection. Make sure you know how this cost affects what you actually walk away with before you put your home on the market.
“Plan ahead so taxes don’t take a bigger share of your hard-earned gains.”
2. Pre-sale repairs and preparation. Even in a steady Memphis market, most homes need a bit of work to get ready before hitting the market. Preparation costs can include:
- Painting
- Landscaping
- Pressure washing
- Minor repairs
- Professional cleaning
- Staging and photography
- Pre-listing inspection (depending on the property)
Sellers can end up spending anywhere from a few thousand dollars to $15,000 or more getting their home ready. The key isn’t to over-improve, but to make smart, strategic updates that attract strong offers and cut down on inspection issues. When done right, preparing your home can boost what you actually walk away with. Done without a plan, it can quietly eat into your profits.
3. Closing costs and seller expenses. Many home sellers in Memphis are surprised to learn they have to pay part of the closing costs. These can include things like the home’s title insurance, fees for handling the sale, property taxes, and any homeowners’ association fees if your neighborhood has one.
On top of that, buyers may ask for repairs to be covered or for help with some of the closing costs after an inspection. These costs come straight out of what you earn from the sale, which is why it’s important to plan your asking price carefully and be ready to negotiate.
4. Property taxes and capital gains. Tennessee doesn’t have a state income tax, which is good news for homeowners. But you might still owe federal taxes on the profit from selling your home, depending on your situation.
If this has been your main home for at least two of the last five years, you may be able to exclude some of that profit from taxes. But if it’s an investment property or you’ve owned it a long time and its value has gone up a lot, taxes could take a bigger bite out of what you make.
Talking with a tax professional before you sell can help you plan and ensure you keep as much of your money as possible.
5. Net proceeds. The biggest mistake many Memphis sellers make is focusing only on the sales price. Just because a home has a higher listing price doesn’t mean you’ll take home more money. Repairs, credits, commissions, and taxes all affect what you actually end up with.
Smart sellers think about how much they want to walk away with first, then work backward to set the right price. Running a realistic estimate of your net proceeds before listing helps you know what to expect and avoids surprises at closing.
If you want a clear breakdown of your real costs, an estimate of what you’ll actually take home, and a plan to protect your money instead of just looking at the sales price, reach out to (901) 591-8100, john@johnquinnteam.com, or visit www.johnquinnrealestate.com. I’d be happy to guide you through every step of the process.
